Barrick Mining (ABX.TO)

Gold as a sector is not good. She has a low weighting. She would not short because the price of gold has come done so much. There could be a relief rally. You could also have seen some tax loss selling in the stocks.

The gold stocks have come off a lot. Hs concern with this company is the price of gold. Gold has come down the least compared to other commodities, so it may have a lot farther to go yet.

It is very premature to be looking at gold and he will continue to be completely out of the space.

He doesn’t own any golds. As long as the US$ is this strong, it is going to be negative for gold. We are 6-9 months away from a gold bottom, although you could trade it in little bands. When he goes to gold, it would not be this one because they are so large they have trouble growing.

Feels the strong US$ could push gold lower. This company has been beaten down tremendously. As a conservative gold play, he prefers Franco Nevada (FNV-T). For a more pure play, in case of a turnaround in gold, he would prefer something like Detour Gold (DGC-T).

A lot of miners have already had that big bounce and we are still in the period of seasonal strength which runs through until the end of September. $12 was its previous support and it has broken down, and that will be expected to act as resistance.

He is concerned about the balance sheet and delays. He is concerned about the failure to merge with Newmont.

This is a bit more speculative than it is an investment; it has a very high risk/reward return profile. If the price of gold starts to go up at all, this will certainly prosper from some operating leverage. Right now they are in the position of having a lot of debt and having to dispose of some assets. There are more secure companies to hold in gold than this one.

He is not a fan of gold. It doesn’t pay a dividend and is more of an emotional item. Supposedly the breakdown in gold is because the Chinese are not buying as much. Also, this company has a lot of debt and are trying to sell off assets.

He likes the gold sector in general as he thinks the US$ eventually comes off. However, he would not put this company anywhere near the top of his list. They are still paying for their overexpansion of the past decade or so. Having to sell production right now and get the debt down is going to hamper their growth going forward. He would rather buy midsize Canadian producers that are showing production growth, have a clean balance sheet and might get taken out. This company’s balance sheet is still a mess; their production profile is not that good and they still have to sell assets.

Chart shows this has been building a base since 2013. The gold sector, for the 1^st time in a while, is starting to look interesting. If you are going to buy into the sector, you are probably better off to just buy the basket through an ETF.

It is trying to hold the price. It has underperformed the index and especially gold. It is a laggard. Avoid it.

He doesn’t own any gold stocks. When there are big down days like this, and people are looking for liquidity, everything goes down. Gold is a very difficult product to value, because its marginal costs shift around a lot. This company’s balance sheet is in pretty bad shape.

People keep asking how gold can be up and this company is just a disaster. The enterprise value was $15 billion and is now $30 billion. However, debt has gone from no debt to $10-$12 billion. In effect the debt owns the gold and you don’t.

One of his concerns is that there is a lack of growth. Even in a poor market like this, there are still opportunities for companies adding production and cash flow and earnings-per-share. They are in the process of shrinking a bit, looking at asset sales and trying to fix the balance sheet. He prefers Agnico-Eagle (AEM-T) and Goldcorp (G-T).